When a business consists of only one type of model, we can describe it as a Chicken, a Pig, etc.
When a business comprises multiple types of business models, we categorize the company based upon the combination of model types.
Dell Computer (NASDAQ: DELL) is a mix of two model types.
Its online business, the one that sells to individuals, is a Locust.
The business that sells everything from managed services to PC replacement programs to corporate institutions in multi-year, renewable contracts is a Chicken.
In model terms, Dell is diversified. It operates different model types.
Wal-Mart (NYSE: WMT) is a mix of two businesses of the same model type.
Its discount retail business is a Locust business.
Its grocery business is also a Locust.
In model terms, Wal-Mart is NOT diversified. With two models of the same type, it operates a compound enterprise.
The Walt Disney Company (NYSE: DIS) is an archetypical "big business." It houses many different models.
Its theme parks, hotels, cruise ships, and movie business (to name just a few) are all Locusts. It is in this regard a compound enterprise.
DIS has (at least) one Chicken model: ESPN. (Cable companies are the recurring revenue providers and the business is stunningly profitable.) Disney is thus a diversified company as it has models of different types (many Locusts and one very large Chicken).
Structurally, DIS is thus both diversified AND compound. The term for this structural configuration is complex.
Dell's 10K filings are fascinating. If you look at a filing from the late '90s, you'll see a company that understood its diversified structure (diagramed above) and recognized the centrality of its Chicken business. A look at a more recent filing, in contrast, shows a company that's horribly confused. They've spent most of their recent energies on the Locust segment, allowing their Chicken value proposition to go stale. No wonder their main rivals are stealing key corporate accounts.
"Structure" usually refers to organizational structure. The best book on organization structure that I've ever read, an absolute gem that's at once readable yet stunningly brilliant, is The Structuring of Organizations
The model approach to structure is radical if only because it eschews traditional themes. To improve your understanding of the structural arrangements of different types of business models within a single company: Chickens and Pigs - The Book
